Saffie is a marketing consultant who specializes in small businesses. Her current client is very interested in estimating the costs for the coming year in order to find the breakeven point. Saffie knows this is an important financial statistic because below the breakeven point, the firm is operating
A)with fixed costs only.
B)with minimal variable costs.
C)with no revenue.
D)with minimal profit.
E)at a loss.

Question

Quizplus · Accepted Answer

The breakeven point is the level of sales at which revenue equals total costs, including both fixed and variable costs. Below the breakeven point, the firm is operating at a loss because costs exceed revenue. Therefore, the correct answer is E, at a loss.

Saffie Is a Marketing Consultant Who Specializes in Small Businesses